VentureBeat » Skylanders

Activision Blizzard says Call of Duty: Ghosts will be a huge launch, but stock falls on weak Warcraft numbers

Dean Takahashi — Wed, 08 May 2013 21:54:49 +0000

Activision Blizzard chief executive Bobby Kotick warned that the industry’s leading video game publisher will face serious competition and possible industry headwinds in the holiday selling season. At the same time, he raised estimates for the company’s financial performance this year based on an outstanding first quarter.

The mixed outlook suggests that the game business is at a more uncertain time now than it has been in years. The industry is in a transition year for consoles, and competition from smartphones and tablets is bigger than ever. At every turn, Activision Blizzard faces more competition. This outlook is different compared to the company’s last comments in February, and it means that Activision will have to spend more on marketing and advertising to hang on to its customers this fall.

Activision plans a major new launch of its Call of Duty: Ghosts first-person military shooter Nov. 5, with a bigger sales and marketing campaign than ever before for a blockbuster Call of Duty game. But the title will face competition from the likes of Electronic Arts upcoming Battlefield 4 and other titles coming for the next-generation consoles.

In a call with analysts today, Kotick didn’t name his competitors, but he said that the weakness of Nintendo’s Wii U game console and the coming competition in the second half is making Activision Blizzard extra cautious about predicting good results. A new version of Activision’s Skylanders is coming this fall. That game, Skylanders: Swap Force, features toys with top and bottom halves. Players can swap those halves to form new creatures for use in the video game. But Skylanders will face huge competition starting in August from Disney Infinity, another game-toy hybrid entertainment product.

Skylanders, another billion-dollar franchise launched just two years ago, is now the No. 1 game franchise of the year, said Eric Hirshberg, CEO of Activision Publishing. That makes it bigger than the No. 2 Call of Duty: Black Ops II in the U.S. and Europe. He said Skylanders was doing well despite the weakness of Nintendo’s Wii and Wii U.

The company is still the healthiest firm in the video game business, with more than $4.6 billion in cash. Its business is driven by major franchises, including Call of Duty, World of Warcraft, Skylanders, and PC games such as StarCraft II: Heart of the Swarm. These have helped make the company into the largest publisher of video games, and it has been making more money than rivals such as EA.

But gaming’s No. 1 publisher warned that risks in the second half of 2013 are “more challenging than our earlier view.”

Activision made no mention of major new franchises in the works, such as Blizzard’s new massively multiplayer online game, code-named Titan. But the pressure to launch that game is building.

Kotick said that while World of Warcraft remains the No. 1 fantasy online role-playing game, it lost 1.3 million subscribers in the quarter, leaving the game with 8.3 million players. The company expects that number to fall further by the end of the year. In recognition of competition from free-to-play games, the company is figuring out how to launch updates more frequently. But it does not have big update, like last year’s World of Warcraft: Mists of Pandaria, on the way.

In after-hours trading, Activision Blizzard’s stock price fell 5 percent to $14.49 a share. The fall may be due to the drop in World of Warcraft numbers and the comments about the second half.

“I think WoW numbers are a bigger deal,” said analyst Michael Pachter at Wedbush Securities in an email. “They are not telling us anything we didn’t know before about competition or weak Wii U sales. The surprise is the sequential drop off in WoW subscribers.”

Mike Morhaime, the head of the Blizzard Entertainment division, said in the conference call that his company is working on its first cross-platform free-to-play game, Hearthstone: Heroes of Warcraft, for the PC, Mac, and iPad. Blizzard’s revenue was up due to sales of StarCraft II: Heart of the Swarm, which sold 1.1 million copies in its first two days. But Blizzard saw a decline in Asian subscribers for World of Warcraft. He said the company will launch new game content at a quicker pace to improve engagement. StarCraft II content is now viewable on Korean TV five days a week (as the Koreans are game fanatics and have a special love for StarCraft).

Morhaime said the company is also working to modify Diablo III so that it will ship on the PlayStation 3 console. BlizzCon is coming to the Anaheim Convention Center in November, and tickets sold out in a matter of minutes. He said the company continues to work on Blizzard All-Stars and the unannounced MMO.

“Regardless of the near-term volatility in the industry, our focus and our disciplined approach to our business, which has served us well in the past, will enable us to continue delivering shareholder value in the long term, as we have for the last 20 years,” Kotick said.

Hirshberg said on the call that Call of Duty: Ghosts is coming Nov. 5. He said that Activision is showing Ghosts at Microsoft’s May 21 event for the debut of the next-generation Xbox in Seattle. Ghosts will have a new story and new characters as well as the biggest sales and marketing campaign ever for a Call of Duty game. That’s saying a lot, since Activision Blizzard makes a lot of noise about Call of Duty every year. Kotick said he would not predict a dramatic shift in the business models for the next-generation game consoles, but he said, “We approach new businsses skeptically.”

Hirshberg said that the current Call of Duty: Black Ops II saw first quarter usage and engagement that was higher than a year ago. The company has launched another map pack, dubbed Uprising, to keep players engaged. Sales for Black Ops II are higher than Call of Duty: Modern Warfare 3 from the year before. Hirshberg said that Call of Duty’s new business model of selling microtransactions, such as a bacon-wrapped decoration for a gun, is also doing well.

“We introduced an all new business model of selling micro DLC (downloadable content),” he said. “It delivers extra value for our fans but in no way compromises game play.”

For the year, Activision Blizzard expects non-GAAP revenue of $4.25 billion for the year and earnings per share of 82 cents.

Filed under: Games

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Activision blows away first quarter earnings targets, raises estimates for year

Dean Takahashi — Wed, 08 May 2013 20:15:42 +0000

Activision Blizzard reported better-than-expected earnings today for its first quarter ended March 31.

Activision Blizzard’s business is driven by major franchises, including Call of Duty, World of Warcraft, Skylanders [above], and PC games such as StarCraft II: Heart of the Swarm. These have helped make the company into the largest independent publisher of video games, and it has been making more money than rivals such as Electronic Arts.

But gaming’s No. 1 publisher warned that risks in the second half of 2013 are “more challenging than our earlier view.” But it also raised estimates for its financial performance. The company now expects revenues of $4.25 billion on a non-GAAP (generally accepted accounting practice) basis in 2013, compared to its earlier outlook of $4.175 billion. It also expects earnings per share of 82 cents, compared to 80 cents earlier.

The Santa Monica, Calif.-based company previously warned that 2013 would be a tough year, partly because it will have a major transition to new consoles for Microsoft and Sony. On a non-GAAP basis, earnings per share were 17 cents, compared with 6 cents a share a year earlier. Revenues were $804 million, compared with $587 million a year earlier. For the first quarter, analysts expected to see revenues of $704 million and earnings per share of 11 cents.

In after-hours trading, Activision Blizzard’s stock price fell 5 percent to $14.49 a share. Before that, the stock closed today at $15.26 a share, up 2.14 percent. GAAP revenues for the quarter were $1.32 billion, up from $1.17 billion a year ago and better than the expected $1.16 billion. GAAP earnings per share were 40 cents, up from 33 cents a year ago and the expected 29 cents a share

Activision Blizzard chief executive Bobby Kotick said in a statement, “Our first-quarter performance was driven by continued consumer interest in all of our key franchises.”

Kotick said that Blizzard Entertainment’s StarCraft II: Heart of the Swarm was the No. 1 PC game for the quarter. He also said that Blizzard’s World of Warcraft remained the No. 1 subscription online game with more than 8.3 million subscribers. But that number actually represents a loss of 1.3 million paying subscribers. Most of that loss was in Asia.

And this decline is one of several reasons why Activision is speaking cautiously about the second half of 2013 despite raising earnings estimates.

“While we have had a solid start to the year, we now believe that the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter. The shift in release dates of competing products, the disappointing launch of the Wii U, uncertainties regarding next-generation hardware, and subscriber declines in our World of Warcraft business all raise concerns, as do continued challenges in the global economy. For these reasons, we remain cautious,” Kotick said. “However, our focused and disciplined approach to our business has served us well in the past, and through continued investment and careful management of our costs, we expect to continue delivering shareholder value over the long term as we have for the last 20 years.”

Last quarter, Activision Blizzard said its outlook for 2013 was for non-GAAP revenues of $4.175 billion and net income of 80 cents a share. It also previously said it had expected $690 million in revenue and earnings per share of 10 cents for the first quarter. For the second quarter, it now expects non-GAAP revenues of $590 million and earnings per share of 5 cents.

Before the earnings were announced, analyst Michael Pachter of Wedbush Securities expected the company to beat earnings targets because of continued strong sales of Call of Duty: Black Ops II, which sold more than $1 billion in its first 16 days back in retail in November. Overall retail software sales for console games were up 19 percent in the first quarter, according to NPD. Pachter also said that the newest version of Skylanders, Skylanders: Giants, was selling better than he and others excepted it would.

In the future, Activision will publish a new first-person shooter game from Bungie, the maker of the smash hit Halo series. Pachter believes that Destiny would arrive in the fourth quarter of 2013. Analyst Arvind Bhatia of Sterne Agee said that he is bullish on Activision Blizzard and its long history of exceeding expectations.

Filed under: Business, Games, Mobile, Social

Disney Infinity takes shape as a huge investment in transmedia (hands-on preview)

Dean Takahashi — Mon, 15 Apr 2013 16:00:17 +0000

When Disney announced its Infinity platform for combining toys and video games in a single entertainment platform, it was easy to dismiss it as a Skylanders copycat.

Activision has seen more than $1 billion in revenues from its Skylanders toy-game hybrid products. Disney’s offering is similar, but it is pouring a lot of its game- and toy-design chops into making sure that Infinity will be unique and valuable, considering that fans could pour a lot of money into this new platform over time.

Disney had originally targeted a June launch, but it delayed until August to make sure the game is polished. Disney is position Infinity as a platform to transform it into a huge game company, for once and for all.

We got a look at Infinity recently, and it’s clear that Disney’s engaging in a full-scale cross-platform toy and game war. Infinity is going to have depth and scale, and it will benefit from tapping into some of the biggest entertainment brands on Earth, said John Vignocchi [above], the executive producer of Disney Infinity, in an interview with GamesBeat.

“We have this treasure chest of intellectual property, and we can decide how much of that to leverage in Disney Infinity,” Vignocchi said.

Disney is making several entertainment properties available on Disney Infinity from its inception. So it’s clear that Disney isn’t just testing the waters with Infinity.

The toy-game competition is perhaps one of the biggest wagers any company could make in entertainment. That’s why only the biggest companies — Nintendo, Disney, and Activision — are moving into the market so far. But Infinity isn’t the only project happening. Disney will continue to invest in standalone games, such as separate mobile games from Disney Mobile. And if Disney Infinity is a hit, the entertainment company could have a profit engine for years to come.

Disney began work on Infinity shortly after it shipped Toy Story 3: The Video Game in mid-2010. The company’s Avalanche Software division in Salt Lake City was enamored with that Toy Story 3′s Toy Box mode, which was an open world where you could engage in any kind of play with a bunch of different characters. Kids could build their own town from scratch, and it was clearly the innovative part of the title.

Then Disney adapted to the shift toward social and mobile games acquired social game maker Playdom for $763.2 million in July 2010, and it also grabbed mobile game maker Tapulous in mid-2010. Playdom’s CEO John Pleasants became the head of Disney’s game business, as the move toward digital games took on a new urgency.

A big part of the team was working on a game for Cars 2. But a smaller skunk works team at Disney’s Avalanche focused on a game called Buzz Lightyear Star Command. In conversations with that team, Pleasants directed to do something much more ambitious that would be a platform for all Disney games in the future.

“Instead of a one-off game based on Tron or Tangled, what if we could make a game using the same engine and tools and vary the amount of content we could do for a particular Disney property,” said Vignocchi. “The idea of creating a platform really resonated with us.”

While this was happening, Activision Blizzard launched Skylanders: Spyro’s Adventure in October 2011. That title combined a multiplatform game with a line of toys that you place on a “portal” connected to a game machine. By placing the character on the portal, the toy character transfers into the game for the player to control. The series was an instant hit, and it has sold more than $1 billion worth to date, with toy sales beating out sales of Star Wars toys. That’s a real threat to Disney, and, while Disney executives won’t acknowledge it, Disney Infinity was clearly adapted to mimic the toy-game hybrid strategy of Skylanders.

But Disney’s own portal, or “Infinity Base,” isn’t an exact copy. The base lights up with different color LED lights based on which character is on it.

Like with Skylanders, you place a Disney toy character on the portal to activate that character inside the game. But you can also add “power discs” in the form of plastic hexagonal discs for the character to stand on. Those separately purchased power-ups give the character new abilities, and you can put up to two of them under a character. You can improve a character’s health by 20 percent or give the character an economic boost.

The starter pack for a character comes with one of those power discs included. Kids can trade those discs with each other. That enhances replayability for the toy-hybrid platform, giving players a reason to acquire a new toy for $12.99 each. The base package will sell for $75, including the game and the base platform. The potential for additional collectible toy sales is enormous — and it’s on a scale that only Disney can do.

The software is broken into playsets, or “true to property experience,” Vignocchi said. These are original stories based on the entertainment property, such as the upcoming Monsters University coming out in June from Disney’s Pixar animation division.

“The days of going to see the movie and going home to play the same story in the game are gone,” Vignocchi said. “Players want a new adventure. That’s what we aim for with every play set.”

The game teams are working with filmmakers to create the original stories and craft characters for the games.

The other part is the Toy Box mode, which is like the toys on your living room floor. They’re all mixed together. You can mix and match Disney characters from different properties in the Toy Box mode. In that mode, you can add a “theme disc” to the back of the portal, changing the whole background of the world to match the theme. You can, for instance, switch from a Toy Story world to a Tangled world in an instant.

“It’s not a linear, level-based game” like the Skylanders games, Vignocchi said. “Players can decide where they want to go and how they want to play. There’s no wrong way to play the games.”

At the outset, the Toy Box world is populated with a mash-up of buildings and environments from different Disney properties. The creativity part of the platform is designed to be intuitive. With Toy Box, you can use a magic wand to highlight different objects. Once it is highlighted, you can move that object around, delete it, or edit it. You can rotate the item or use it to build things like castles in the sky. When you’re editing an item, you can change the texture of the item so it will look different in the world. You can modify the nature of the world very quickly simply by putting a power disc on the Infinity Base.

Filed under: Business, Games

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GamesBeat weekly roundup: Luigi turns 30, and Obama says we need more gamers

Jasmine Maleficent Rea — Fri, 15 Feb 2013 19:07:41 +0000

If you follow VentureBeat but don’t regularly check our GamesBeat site, here’s a list of the best video game stories we ran over the last seven days that you may have missed.

This week, World of Warplanes developer Wargaming bought Gas Powered Games, Nintendo announced a bunch of new content focused on Luigi as the company celebrates his 30th birthday, and both House of Representatives Minority leader Nancy Pelosi (D-Calif.) and President Barack Obama defended video games.

You’ll also find a review of Aliens: Colonial Marines and previews for Monster Hunter 3 Ultimate and Darkstalkers Resurrection.

News:

Mobile News:

Reviews:

Aliens: Colonial Marines isn’t the Aliens sequel you wanted (review)

Previews:

Interviews:

Pieces of Flair:

Filed under: Games

Skylanders crosses the $1B revenue mark with over 100M toys sold

Jeffrey Grubb — Mon, 11 Feb 2013 18:18:39 +0000

Activision makes a lot of money from a few properties, and it just added another franchise to its billion-dollar club.

The company revealed that the Skylanders series generated more than $1 billion since its debut in 2011. A huge chunk of that revenue comes from the over 100 million Skylanders toys the company has sold.

“The Skylanders franchise became the first kids’ video game intellectual property to cross the $1 billion mark in just 15 months, and I think we are still just starting to realize its potential,” Activision Publishing chief executive officer Eric Hirshberg said in a statement. “We knew that the simple, but magical, idea of bringing your toys to life in a video game could change both the video game and the toy industries and, more importantly, change the way kids play.”

Skylanders did ambush the market with technological innovation. Each figure comes with a special “portal” for the player to place toys on. Those toys then instantly manifest within the game. So instead of creating a game and separate line of toy merchandise, Activision’s Toys For Bob studio created a product that requires both to fully function.

That business model propelled Skylanders action figures to outsell Star Wars and Transformers toys at retail.

A new Skylanders game is due out in 2013. It would make the third game in the series in three years.

“This fall, we’re looking forward to delivering to fans our latest break-through innovation, Skylanders Swap Force, which lets kids customize their own characters, bringing toys to life to a whole new level,” said Hirshberg.

Players can use Swap Force to mix and match the legs and bodies of various new action figures. It debuts this fall for major gaming platforms.

Filed under: Games

GamesBeat weekly roundup: Disney Infinity, torsos, and violence in video games

Jasmine Maleficent Rea — Fri, 18 Jan 2013 21:03:20 +0000

If you follow VentureBeat but don’t regularly check our GamesBeat site, here’s a list of the best video game stories we ran over the last seven days that you may have missed.

This week, Disney announced its version of a Skylanders-like game featuring characters from the company’s various intellectual properties, President Barack Obama urged Congress to research the effects of violent video games on children, and the Internet takes Dead Island: Riptide to task over a controversial preorder bonus.

News:

Mobile News:

Interviews:

Reviews:

Previews:

Oculus Rift is virtual reality that won’t make you barf (hands-on preview)

Community Spotlight:

Pieces of Flair:

Filed under: Games

The DeanBeat: Disney starts a cross-platform toy war with Activision

Dean Takahashi — Fri, 18 Jan 2013 16:00:11 +0000

Toy war. It sounds like a title for a game or a movie. But it applies to the business competition between Disney and Activision Blizzard that erupted this week. You might call it the first major “transmedia” war between two heavyweight entertainment companies that are both deeply involved in video games. The winner will be able to stake out a leadership role in the cross-platform worlds of toys, video games, mobile apps, and online universes.

In short, the victor will carve out a toy-game empire.

On Tuesday, Disney unveiled its Infinity interactive gaming platform, which pulls together characters from Disney and Pixar into the world of digitally connected toys and games. It is a direct challenge to Activision Blizzard’s Skylanders franchise, which generated $500 million in retail sales of toys and video games in 2012. Who is going to win? In this battle, brands, marketing, technology, and gameplay should set apart the victor and the loser.

Both companies are bringing toys to life in the virtual environments of games across consoles, mobile and online. The toys serve as storage devices, keeping a gamer’s custom data for use in the game. And players can unlock the game and characters from a number of platforms. Activision has a head start. It said that its toys are outselling both the Transformers and Star Wars lines of action figures. That’s a shot across the bow for Disney, which now owns the Star Wars brand. (Hasbro currently produces action figures under the Star Wars license.)

Based on Skylanders’ positive reception, Disney’s Infinity could very well be a huge driver of demand across different marketing channels. Kids (and adults) already love the Disney and Pixar characters, and this Infinity platform will give them multiple ways to engage with those characters. They can play with them in the home, at a friend’s house, or on the run with a mobile device. The market demand for one character will pull consumers into getting the same character on a different platform.

Technology is making it possible. The Disney and Pixar characters (starting with Captain Jack Sparrow of the Pirates of the Caribbean, Sully from Monsters. Inc., and Mr. Incredible from The Incredibles) stand on power discs that connect to the Infinity platform. That seems an awful lot like the Portal of Power that the Skylanders connect to.

Skylanders use a cheap radio-frequency identification chip — much like the ones in employee badges that unlock company doors — that interacts with a reader in the portal. Disney’s Infinity, which arrives this June, probably uses a similar technology for data transfer, and it can connect with a computer or console via a USB port. Players use this tech to drop in or drop out, shifting from one character to another quickly simply by moving a character onto the platform. These portals provide the basic connectivity and storage of saved games. But I expect new technologies to come into the platforms over time.

Disney has the advantage of having bigger brands, with scores of characters to churn out that any child would recognize. The Skylanders had the advantage of novelty, but they’re definitely less memorable. Either side could spend a lot of money to publicize its characters, but Disney definitely has the upper hand in marketing muscle. Activision will have to accelerate its plans to update Skylanders. Already, its Toys for Bob game studio in Novato, Calif., is working at a punishing pace, having launched two major games in 10 months. Now it will have to come up with something new again. Disney, meanwhile, has huge resources to bear as it tries to be a fast follower.

Can startups play in this game? Certainly, Disney and Activision have upped the ante. If you have just a toy business, or a game business for kids, you’ve been disrupted. San Francisco-based Nukotoys labored for years before it debuted its hybrid of physical card games with mobile games on an iPad. Nukotoys may get swamped by Disney and Activision. But Nukotoys has brands of its own. It teamed up to deliver card games based on the Animal Planet and Monsterology.

The scary thing about this transmedia business is that the bets are huge. And the consequences of failure are tremendous. If you fail, you don’t just fail in one business. You can bring down a whole franchise across multiple platforms. That’s why this competition between Disney and Activision will be so interesting to watch.

Filed under: Business, Gadgets, Games

Disney Infinity: Made possible because Disney owns all of this

Alejandro Quan-Madrid — Thu, 17 Jan 2013 19:00:56 +0000

No other company besides Disney could make Disney Infinity. Aside from the obvious, the amount of resources it can pull together for this upcoming platform is staggering.

Disney Infinity is essentially an open-ended Grand Theft Auto sandbox with a Minecraft/LittleBigPlanet creative component that you can use to make their own content. You can unlock new characters, items, worlds, and more by placing stylish collectible figures and chips onto a special base. And everything is wrapped in the family-friendly ethos of the Disney films and theme parks.

Infinity launches this June for PC, all major home consoles, and mobile platforms. Leading up to the summer, the House of Mouse is making a big push to establish this new brand (read: money machine). It officially unveiled Infinity this week at the classy, Disney-owned El Capitan Theatre in Hollywood, Calif. John Lasseter, the chief creative officer at Pixar and Walt Disney Animation Studios, was on hand to talk about Infinity’s emphasis on play and creativity.

I had a chance to preview the game and learn about all its different elements. I came away with one main conclusion: Regardless of how you feel about conspicuous consumption or one company owning so many different things, you must admit that something as ambitious as Disney Infinity is only possible because one conglomerate owns all this:

Walt Disney studios: It’s no coincidence that Infinity and the upcoming Monsters University film are both coming out in June — and that the game features characters and stages based on the movie. Expect this to become the norm whenever a new high-profile Disney flick comes out. Instead of having to spend two or three years making a standalone movie-game tie-in, developer Avalanche Software can just make a new set of levels and characters to expand Infinity.

Executive producer John Vignocchi explained to me that Disney hooks Avalanche up with unprecedented access to filmmakers like Jerry Bruckheimer (Pirates of the Caribbean), Tim Burton (The Nightmare Before Christmas), and their teams.

Talk about going to the source for authenticity.

The type of audiences that Disney commands from its motion pictures is tremendous, and now each of those viewers is a new potential customer to try an inspired interactive experience with Infinity. How many people are fans first of Spyro the Dragon and other characters from the rival Skylanders series and then get into the games second? Compared to all those for the beloved Disney franchises, not many.

Since Avalanche is able to draw from all the Disney-owned properties, what else might we see in the game? One of the add-on vehicles available at the event was the Electric Mayhem bus from The Muppets. Does this mean we might see some Marvel Avengers or Star Wars content when Disney releases those blockbusters in the following years?

“The possibilities are infinite,” Vignocchi said.

Parks and resorts: Picture the iconic Sleeping Beauty castle from Disneyland with a Finding Nemo underwater twist. Now, swap out the coral decorations for some neon-laced Tron trim. Add a constantly growing interactive world around it and you start to get the idea. These are the kind of images Disney showed us to promote some of the creative potential for players using the Minecraft-inspired level-editor Toy Box.

The theme park connection is also visible in the Play Sets. These are what Disney calls the different in-game worlds (each with mission-oriented gameplay) that players can unlock with Play Set figures. The Pirates of the Caribbean level we saw had a couple of visual references to the classic ride. As Captain Jack Sparrow rowed a boat under archways and between vessels exchanging cannon fire, I instantly thought of the Disneyland attraction. No one had to tell me. The park experience is that ingrained in me, and that can be a powerful way to connect with customers

Consumer products: “We’re all game developers,” Vignocchi said. “So while we hoped and dreamed, since the inception of Infinity back in 2010, that we’d have this line of collectible figures that went with it, none of us know how to make toys.” That’s where Disney’s massive Consumer Products division comes in. This is the group that manages the mountains of official Disney licensed stuff in stores.

They help us “identify factories that we we’re going to work with for manufacturing, make sure that we’re delivering the correct file formats to the various factories, quality assurance, working with the FCC. …” said Vignocchi.

Disney’s Imagineering and other research teams also served as consultants to the special figurine technology that Avalanche conceived of. Those teams are also helping to develop what future versions of the base reader (what you use to connect the toys up to the game) can do.

Club Penguin: With user-generated content, fans inevitably will try to make levels featuring swastikas, marijuana leafs, penises, four-letter words — you name it. Hell, some rogue Disney animators even inserted a picture of a topless woman into The Rescuers. That’s apparently the kind of thing some people will always do given creative freedom.

To keep the game environment family-friendly, Disney is bringing in some pros to vet the levels that players submit. The customer support staff from the popular online children’s game Club Penguin (which reportedly has over 30 million registered user accounts) will sort through submissions and weed out the inappropriate ones before players can download any of it for Toy Box mode.

Club Penguin is aimed at kids ages 6-14 and has been around since 2005. I cannot imagine a group of people who have more experience cleaning up online f-bombs and hate speech than the folk who work there.

Avalanche Software: A quick glance at this developer’s portfolio shows that the people there definitely know how to make solid licensed games. They’ve been crafting them since Disney acquired the studio in 2005. More intriguing is the Octane development engine that they’ve been adding to for the past 11 years.

“Right now, I know that we have well over 60 different mechanics in the game,” said Vignocchi. “Whether that’s melee combat to sword fighting to projectiles, driving … it is on par with some of the biggest games out there, like Grand Theft Auto, and it is a ‘family game.’”

This foundation is essential for Avalanche to make each Play Set feel different. The Incredibles level involves a lot of superhero fighting and robot smashing, while Monsters University is more focused on stealth to scare students from rival Fear Tech. The Pirates of the Caribbean world featured galleon customization and naval gun battles. These certainly aren’t cookie-cutter platformers. Considering how many developers treat the stable cash-in of licensed properties, it’s refreshing to see Avalanche go the distance. “As game developers,” Vignocchi said, “our mantra is, we kind of take a page out of Pixar’s book, we create games for ourselves but that are accessible to kids.”

That focus will ultimately benefit fans since the freedom in Toy Box mode turns them into game makers. In a demo video, we saw how quality assurance staff could change the camera angle to 2D for a working Donkey Kong arcade game level. Another person re-created the Bowser’s Castle race track from Mario Kart 64 that players can actually drive on. When you add in the programming logic items that enable aspiring level designers to add and chain together triggers, doors, moving platforms, and more, the potential is pretty promising. Disney plans to foster user creativity by holding themed contests.

It’s that emphasis on play and imagination that appears to ground Disney Infinity. So much of this corporate synergy is a bit mind-boggling. The business model is classic Disney (movie tie-ins, collectible trinkets and toys, and so on), but it’s the gameplay that will determine whether Infinity is just a massive cash-in or the title that could finally establish Disney Interactive as a formidable, traditional game maker.

Filed under: Gadgets, Games

Watch the Disney Infinity figures wiggle in 3D

Alejandro Quan-Madrid — Wed, 16 Jan 2013 15:00:24 +0000

One thing is for certain: Disney is going to cash in with the sales of these collectible, interactive figures for its upcoming Disney Infinity video game. They work similarly to the popular Skylanders series where each toy can unlock a different character to play as in the platformer. Disney plans to release Infinity on June 18 (as repeatedly told to me by a development team member demoing the game) for PC, Nintendo Wii, Wii U, PlayStation 3, Xbox 360, and various mobile platforms.

I suppose we can then expect a chaotic eBay black market to emerge for the 2013 holiday season (the figures regularly retail for $12.99 each). In the mean time, check out these 3D wiggle pictures I snapped of a few treasured Disney characters using my Nintendo 3DS. If you suffer from seizures, however, you might want to hold off on looking … especially at that Incredibles one at the end.

The collection of interactive figurines Disney has unveiled so far for Disney Infinity

Sully and Mike Wazowski from Monsters, Inc. and the upcoming Monsters University

Captain Jack Sparrow and Hector Barbossa from The Pirates of the Caribbean

Violet, Mr. Incredible, Elastigirl and Dash from The Incredibles

Filed under: Business, Games

Disney’s new Infinity project uses Skylanders-style toys

Alejandro Quan-Madrid — Tue, 15 Jan 2013 22:42:07 +0000

HOLLYWOOD, Calif. — Video game companies are paying attention to the success that Activision’s struck with its Skylanders series. That’s the clear message behind Disney Interactive’s news today, as the House of Mouse’s video game arm showed of its upcoming Disney Infinity sandbox project — and revealed that it uses collectible figures to unlock different worlds and characters.

These new figures work similarly to Activision’s toy-infused Skylanders series; players save their game data on the toys, which they can take on the road (like to a friend’s home). The developer who walked me through a demo of Infinity repeatedly said the release date was June 18, roughly alongside the highly anticipated Monsters University film.

Disney took inspiration from the popular, stylish vinyl figurines available at its theme parks. It is not, however, use the same the technology as Skylanders despite the similar functionality. It developed this technology in-house.

The figures will retail for $12.99 each.

Filed under: Business, Gadgets, Games

GamesBeat weekly roundup: Disney buys LucasArts/Lucasfilm, Halo 4 reviewed, and Valve dislikes Windows 8

Jasmine Maleficent Rea — Fri, 02 Nov 2012 17:32:17 +0000

If you follow VentureBeat but don’t regularly check our GamesBeat site, here’s a list of the best video game stories we ran over the last seven days that you may have missed.

This week, Valve claims the Linux operating system is more viable than Windows 8, Disney buys Star Wars studio Lucasfilm as well as LucasArts, and hurricane Sandy delays Take-Two Interactive’s earning call.

You’ll also find reviews for Halo 4, Pid, Assassin’s Creed III: Liberation, Assassin’s Creed III, WWE 13, and Medal of Honor: Warfighter.

News:

Mobile news:

Earnings:

Reviews:

Previews:

Nintendo Land will make you hate your friends and family (hands-on preview)

Interviews:

Pieces of flair:

Filed under: Games

GamesBeat Weekly Roundup

Jasmine Maleficent Rea — Fri, 11 May 2012 20:48:39 +0000

If you follow VentureBeat but don’t regularly check our GamesBeat site, here’s a list of the best games stories we ran over the last seven days that you may have missed.

This week Minecraft on 360 broke all digital-sales records on its first day, controversial marketing specialist Paul Christoforo filed a lawsuit against N-Control, Activision Blizzard touted Skylanders as bigger than Angry Birds, and Take-Two delayed BioShock Infinite.

You’ll also find reviews for Minecraft: Xbox 360 Edition, Toy Soliders, Lone Survivor, and Awesomenauts.

Game sales crash 42 percent in April with a light release schedule and early Easter

Rob LeFebvre — Thu, 10 May 2012 22:30:59 +0000

It was another bad month for game companies. Video game sales fell 42 percent percent in April, with total industry sales falling to $630.4 million from $930.9 million a year ago, according to market researcher NPD Group. The early Easter holiday this year may have contributed to the lower than expected sales numbers, along with a relatively light game release schedule for the month.

The poor performance in April was worse percentage-wise compared to March, when sales fell 35 percent, and February, which was down 20 percent year-over-year. April, like February, had a relatively light release schedule for core console games.

In April, hardware sales were $189.7 million, down 32 percent from last April’s $279.9 million. Software was $292.1 million, down 42 percent from $503.2 million a year ago. Accessory sales held steady with $148.6 million, a one percent increase from last year’s $147.8 million.

The estimated total consumer spending on games includes physical video and retail games, used games, game rentals, subscriptions, full-game digital downloads, social network games, downloadable content, and mobile games. Not counting hardware, sales were $307.2 million, down 42 percent from $533.7 million a year ago. The poor software sales were even lower than what a number of analyst firms predicted. Of course, these sales do not reflect the digital side of games, including social, mobile, and online.

The top-selling game of the month was Activision Blizzard’s Prototype 2 (pictured). Lucasarts’s Kinect Star Wars and Activision Blizzard’s Call of Duty: Modern Warfare 3 were the next top selling games for April, at number two and three, respectively.

Here’s some more analysis from NPD Group’s Anita Frazier:

Overall new physical sales

“This year, Easter fell very early in April, which means most Easter-related purchases may have fallen into March this year, whereas last year, Easter fell late in April causing most sales to fall in that month. We usually find that Easter-related purchases generate an extra 10 percent in revenue in the month they occur, so some of the softness compared to last April could be attributed to the shift in Easter timing.”

Hardware

“One thing to keep in mind is that the 3DS has outsold the DS by about one million units in their respective first 14 months in the market, and the DS went on to become the best-selling gaming hardware system ever.”

“The average selling price for hardware increased over last April, with one of the drivers of that increase being the Star Wars Kinect 360 bundle, which included the Xbox 360 console and controller, a Kinect sensor, and Kinect Star Wars game.”

Content

“I think what the new physical retail content sales reflect a very light release schedule in terms of the amount of compelling new games. Last April, the top seven titles outsold the top-selling title this year, and, simply stated, there were notably fewer new market introductions. I think it’s a simple as that because when we see compelling content come into the market, the games are still selling as well as ever – we just saw a lot less this April as compared to last.”

“Kid Icarus: Uprising on the 3DS ranked among the top 10 SKU’s for the month, and would have made the list if we were reporting on SKU rather than total title level.”

“For some insight into digital purchasing of content, we can look at the performance of points and subscription cards which was up 75 percent in units over last April. These could very well have been last minute additions to Easter baskets early in the month.”

Accessories

“Skylanders characters remain a strong driver of accessory sales. The three character pack SKU’s have sold just under 10 million units in the U.S. since their launch into the market last October.”

Filed under: Business, Games

Skylanders is bigger than Angry Birds, says Activision Blizzard

Rob LeFebvre — Wed, 09 May 2012 21:39:27 +0000

With Skylanders, Activision Blizzard has another big hit series on its hands. And it’s bigger than Angry Birds. Looks like their massive gamble paid off.

In a conference call today, Eric Hirshberg, CEO of the Activision Publishing division, made a surprisingly direct statement on the success of Skylanders, the new toy/video game hybrid for consoles and iOS devices. With 30 million toys sold and $100 million in revenue across toys and games in the quarter, said Hirshberg, Skylanders made more money than the entire business of Rovio’s Angry Birds franchise. Rovio announced today that Angry Birds has been downloaded more than 1 billion times, across both free and paid versions.

In a press release earlier today, Activison said that in North America and Europe, including accessory packs and figures, Skylanders: Spyro’s Adventure was the No. 3 best-selling game overall in dollars across all platforms for the first quarter of 2012 and the number 1 selling kids’ title in dollars in the quarter.

Hirshberg noted that he could not comment on the split in revenue in toys versus video games. He also stated that while Skylanders did have some early issues with high demand and low supply, the company has increased capacity as of now and has made plans for a higher demand come the holiday season. The publisher has not made any decisions on changing prices for the coming year.

The numbers were further bolstered by the release of Skylanders Cloud Patrol, a game based on the franchise for iPhone, iPod touch, and iPad users that features the Skylander characters as well as the ability to type in web codes to redeem and collect new characters in the game. Activision is also looking forward to Skylanders Giants, an expansion that will include larger scale toy characters and new gameplay.

Filed under: Games

Leaked Rayman Legends trailer shows NFC tech in action on Wii U (updated)

Dan Crawley — Fri, 27 Apr 2012 17:40:03 +0000

Update: Ubisoft has confirmed that Rayman Legends is currently in development in Montpellier, with series creator Michel Ancel taking the helm.

A statement responding to the leak of the trailer says: “An internal video showing images of Rayman Origins’ sequel has leaked over the Internet. This video was intended as a purely internal demonstrative video, and in NO way represents the final game, the final console, or their features. This video was destined for internal production teams who often create game prototypes with work in progress development kits.”
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A trailer for the previously unannounced game Rayman Legends has leaked, demonstrating use of the Wii U’s tablet-like controller, and showing how real world objects can be linked with games on Nintendo’s upcoming console.

Activision’s successful kids’ title Skylanders has already demonstrated the potential for selling toys that interact directly with video games. Nintendo’s decision to build near field communication (NFC) technology into the tablet-like controller of the Wii U looks set to expand that market further, when the console launches in the Fall.

NFC technology allows devices to communicate simply by touching them together, or bringing them in close proximity, with connection being established in less than 100 milliseconds. NFC chips can be embedded in cards, stickers, figures, or virtually any other real world object.

The Rayman Legends trailer shows a toy heart being placed on the Wii U controller, which sends hearts raining down in the game. A toy Rabbid — from the Rayman: Raving Rabbids spin-off series — is then used, replacing enemies in the levels with Rabbids. Finally a figure of Ezio, from the game Assassin’s Creed, is teased, but this is not shown interacting with the game, and it may just be a joke by the developer.

The new Rayman title certainly looks as visually stunning as its predecessor, Rayman Origins. Along with its good looks and interesting tech, it will apparently be offering various multiplayer and social features, including races, challenges, and mini-games.

The touchscreen on the Wii U controller is shown being used to manipulate platforms in the game, while three characters are controlled via regular Wii controllers. It is also shown being used as a regular controller, in a two player game.

Speaking about the implementation of NFC technology back in January, Nintendo President Satoru Iwata said: “By installing this functionality, it will become possible to create cards and figurines that can electronically read and write data via non-contact NFC and to expand the new play format in the video game world.”

Iwata also pointed to the potential of NFC tech for making instant purchases via the Wii U: “Adoption of this functionality will enable various other possibilities such as using it as a means of making micropayments.”

Whether it makes a bigger mark as a payment method, or by bolstering the sales of accessories, NFC tech looks set to be a key feature for Wii U. Given third-party use as strong as that seen here, one can only imagine what the future holds for the Pokemon franchise.

The leaked Rayman Legends trailer has now been removed from YouTube, but images from it are presented in the gallery below. The video is still being hosted at French website Gamekult at the time of writing.

Filed under: Business, Games

Activision embraces freemium monetization strategies with Skylanders Cloud Patrol for iOS

Dean Takahashi — Thu, 05 Apr 2012 12:30:56 +0000

Activision Blizzard is diving into freemium monetization strategies for iOS games in a big way with the worldwide launch of Skylanders Cloud Patrol today.

The new app signals a major departure for the company, which has always focused on selling paid games rather than giving them away for free. It shows that the world’s largest video game publisher is embracing change when it comes to new business models in the era of mobile games. It is now taking the No. 1 new kids game of 2011 and moving it onto a platform where content can be given away for free.

“It is Activision’s first ever freemium, microtransaction game,” said Greg Canessa, vice president of mobile at Activision Publishing. “It is a part of a larger strategy and a significant move. You’ll see more of this to come. Activision as a company is looking at this space very carefully.”

The game costs 99 cents, with no free version, but it features the ability to purchase additional goods during the course of gameplay. Other free-to-play vendors usually make a free version to entice players to buy the full version. So for now, this is free-to-play without the free part, but it capitalizes on the strategies of free-to-play games. For instance, in a twist on freemium, you can purchase Skylanders content on one platform and use it for no extra charge on the iOS platform.

The arcade-like shooting game is based on the Skylanders Spyro’s Adventure franchise that Activision Publishing launched with great success in the fall, with more than 25 million toys sold. In console or computer games, the Skylanders series has integrated a line of action toys with interactive entertainment. Kids can plug a Skylanders portal into a game console then set their toy character on top of the portal, and it would magically appear inside the video game. After finishing playing, the child can take the figure off the portal and take a save file and character with them wherever they go.

The great promise of the family-oriented Skylanders is that you can take the same toy and game across a bunch of different platforms. That now includes the iPhone, iPad and iPod Touch devices, too. More than 30 characters from Skylanders Spyro’s Adventure will work in the Skylanders Cloud Patrol game. If you bought one of the toy characters, you can enter the serial number of the action figure and unlock that character in the new game. Otherwise, you will have to use some of your virtual currency, gems, to unlock the character. And these cost real money. You also can earn coins in the game, and those can be used for power-ups.

While iOS may not generate as much revenue as the console or PC game, this is an important move that will enable players to become familiar with the brand for a much lower price.

The developer designed the game itself to be a brand new experience, Canessa said. It is set in a new region of Skylands, known as Kaos, that the evil minions of Portal Master have overrun. You take command of a sky-ship and use your favorite Skylander character to fight the bad guys. You control the game with touch gestures, such as tap-and-shoot or swipe.

“It’s a very casual game and conducive to the iOS audience,” Canessa said. “You’re either touching or swiping as you try to defeat the trolls.”

Activision created incentives for you to swap out Skylanders and use them all in the course of the game. There’s a daily challenge where you can use a certain Skylander to get double experience points. The idea is to get users to re-engage with the game frequently.

Cloud Patrol has social features, such as Game Center leaderboards and achievements, as well as a 3D character view that allows players to browse through their entire collection of avatars. The game has randomized levels for virtually endless play.

Vicarious Visions, a 20-year-old Activision studio based in Menands, N.Y., developed the game. More improvements will come in the future, including ways to make the interaction between toy and mobile devices more “magical,” Canessa said. The team supporting Cloud Patrol is doing so as a live operation, meaning they will continuously update the app over time. The game is instrumented with metrics so that Activision can learn how to improve it.

While the company is entering a crowded mobile market with more than 500,000 active apps in the App Store, it is banking on getting noticed because of the well-known brand, its own marketing around the Skylanders property, the innovative integration with toys, and the investment in gameplay, Canessa said.

Activision has had other iOS games before such as its Call of Duty Zombies and World at War Zombies games. But those were paid apps, which are rapidly becoming a rare commodity on the App Store as free-to-play takes over.

“We are pretty excited about this,” Canessa said. “We are students of the very rapidly evolving mobile space.”

Filed under: Games, Mobile

The Skylanders financial bet gets a lot bigger with Giants sequel

Stefanie Fogel — Wed, 08 Feb 2012 00:16:08 +0000

Skylanders Spyro’s Adventure was a sleeper hit last year, a unique cross-platform product that combined a video game with collectible real-world toys. Now, ahead of the annual North American International Toy Fair in New York City, Activision Publishing is announcing a new sequel for the franchise called Skylanders Giants.

Citing NPD Group data, Activision says Spyro’s Adventure was the most successful kids’ IP launch last year. It became a Top 10 seller in North America and generated the greatest overall single-year sales, inclusive of software and accessories, of any new children’s IP.

By any account, Skylanders was a massive bet on a new entertainment property that combined technology innovation, toys, and video games in a creative way. It turned out to be the biggest bet that Activision made in the video game business last year on a brand new property.

“Skylanders Spyro’s Adventure’s success in 2011 validated an exciting idea — that with the right technology, and the creative minds to support it with engaging characters and story, we could define a new model for children’s play,” said Activision CEO Eric Hirshberg.

Skylanders Giants will mark the evolution of this core concept, Hirshberg says. It will feature eight new collectible figurines that will be twice the size of the original Skylanders, both physically and virtually. Some of them will include a new integrated light technology that will cause them to light up when near or on the game’s “Portal of Power” peripheral. The latest installment of the franchise will also feature an all-new story-driven adventure and advanced integration across console, handheld, mobile, and online.

Fans of Spyro’s Adventure will also be happy to know that their characters will be 100 percent compatible with Giants and will keep their leveled-up stats and customizations.

Retailer Toys”R”Us says it will continue to support the Skylanders franchise with a comprehensive, global marketing program. “While it was still in development, we recognized the potential that Skylanders had to connect with our customers due to its unique merging of physical and digital play,” said Toys”R”Us Chairman and CEO Jerry Storch. “The game was an enormous success last holiday shopping season, and the toys seem to evaporate as soon as they arrive on our store shelves.”

Skylanders Giants is being developed by Toys For Bob, an Activision studio located in Novato, California. Toys For Bob previously spent 2.5 years toiling on a brand new cross-platform video game that married the world of collectible toys with video games through a unique wireless technology that beams data back and forth between the toy and the game.

The idea of melding toys and video games wasn’t new. Toy companies created titles such as U.B. Funkeys that also came with toys. But doing a good job with a very ambitious game is rare. And tying together the products in the way that Activision Blizzard has done is unprecedented. Toys For Bob was able to move forward only because it knew that it could handle the task of making a high-quality video game.

The project took shape a few years ago as Activision Blizzard was pruning back on its investments. Reiche and Fred Ford started Toys For Bob in 1989 and they built a number of video games. Activision bought the company in 2005 and gave it responsibility for developing the Spyro game franchise.

But then Activision Blizzard killed off a lot of game properties so that it could invest more heavily in the really big ideas. Of the top 20 games, only the top five were really selling well. That meant that there was no point in creating a game that might be ranked No. 20.

As the idea moved up the executive chain, it became bigger and bigger. Toys For Bob built up its team for the Wii game to more than 100 developers. Another 100 developers from other Activision Blizzard studios also helped out. Vicarious Visions made the Nintendo 3DS version and Frima built the web, iPad, and iPhone versions.

Filed under: Games

NFC could be a game changer for Nintendo’s Wii U

Dan Crawley — Fri, 27 Jan 2012 14:16:04 +0000

Nintendo is a funny old company. Just when you think it is out of ideas, it has a habit of springing innovation on the market that changes things forever. The Wii brought us motion gaming, and the 3DS saw the mass market arrival of glasses-free 3D tech. Now the Wii U may revolutionize digital sales on home consoles, using communication technology that can link real world items with video games.

In his third quarter financial briefing, Nintendo President Saturo Iwata revealed that the Wii U will include Near Field Communication (NFC) technology, which could be used to link games with real world items and support simple, instantaneous, micropayments. If implemented successfully, the ability for Wii U owners to instantly purchase in-game items or Wii U apps, without needing to share credit card details, could give the newly confirmed ‘Nintendo Network’ an edge over Xbox Live and the Playstation Network.

NFC technology allows smartphones and other devices to communicate, simply by touching them together, or bringing them in close proximity. Unlike Bluetooth, NFC does not require devices to ‘pair’ before communicating, with connections being established in less than 100 milliseconds. Communication is also possible between an NFC device and an unpowered NFC chip, which can be embedded in a card, sticker, figure, or other real world object.

Speaking of the inclusion of NFC functionality in the tablet-like Wii U controller, Iwata said the following:

“As many of you know, NFC is the acronym for Near Field Communication, which is a set of standards to establish radio communication in close proximity. The NFC I’m referring to here is the noncontact NFC standard that is compatible with FeliCa and MIFARE, and is expected to be widely used around the world in the near future.

By installing this functionality, it will become possible to create cards and figurines that can electronically read and write data via noncontact NFC and to expand the new play format in the video game world. Adoption of this functionality will enable various other possibilities such as using it as a means of making micropayments.”

NFC tech is widely used in Japan to pay for anything from a train ticket to a can of soda, with consumers simply ‘bumping’ their NFC enabled smartphone in order to make an instant transaction. Mastercard Paypass is now making inroads with this tech in the US, and it has been suggested that NFC will become a standard smartphone feature by 2015, creating a commerce opportunity of $800 billion.

By enabling NFC transactions on its Wii U controller, Nintendo could open the door to impulse purchases of in-game content and Wii U apps from the comfort of the sofa, without even needing to access the TV. Many consumers are cautious about sharing their credit card information with Xbox Live and the PlayStation Network, with both services having experienced security concerns in the past year. By implementing a secure and instantaneous payment system, Nintendo could overcome some of the difficulties associated with getting consumers to embrace digital distribution on consoles.

From a gaming point of view, the inclusion of NFC is exciting, for the possibilities associated with linking real world items with video games. Activision Blizzard’s Skylanders game has recently shown the potential of merging real life toys with a console, giving players the ability to change character by putting a new action figure on a peripheral, called the ‘portal of power’. Players are encouraged to purchase new action figures to use in the game, which all have their own attributes and powers.

Nintendo is a company that has always seen a strong connection between toys and games, as demonstrated by the phenomenally successful Pokemon series. Looking at the Skylanders model, it is not hard to envision a Wii U Pokemon title, where real life Pokemon cards include NFC tech, and bring Pokemon straight from the foil pack to a TV screen. The purchase of action figures or cards could be used to unlock characters, levels, or special abilities in any game, and the potential appeal of such items to gamers is undeniable. This concept could open up valuable new sales channels for Nintendo, as well as third-party developers.

Nintendo has accepted that its previous online efforts could have been better. The Wii friend codes needed for online gaming were cumbersome, and the Wii Store was clunky and unwelcoming. With the implementation of NFC tech though, and the promise of a user-friendly Nintendo Network service, the company’s online future suddenly looks a lot brighter.

Filed under: Business, Games

The DeanBeat: Skylanders is massive, innovative gamble for Activision Blizzard

Dean Takahashi — Fri, 30 Sep 2011 18:00:36 +0000

EDITOR’S NOTE: Each week, I’m writing a column on videogames called The DeanBeat, while executive editor Dylan Tweney is writing a technology and business column called Dylan’s Desk. They are available to newsletter subscribers a whole day before they appear on the VentureBeat website.

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Bring your toys to life. That was the big idea that drove Activision Blizzard and its game studio Toys for Bob to place a huge bet on a new idea: A massively cross-platform videogame that’s tightly integrated with collectible real-world toys.

That kind of risk-taking is especially unusual in a video game industry that is drowning with clones and sequels. And it represents a huge risk for Activision.

Based in Novato, Calif., Toys For Bob spent 2.5 years toiling on a brand new cross-platform video game that married the world of collectible toys with video games through a unique wireless technology that beams data back and forth between the toy and the game.

The result is Skylanders: Spyro’s Adventure, which will debut on Oct. 16 on the Nintendo Wii, Xbox 360, PlayStation 3, PC, 3DS, the web, the iPad and the iPhone. This kind of multiplatform launch with a new technology is almost as big as launching a giant new game franchise or a new console.

Paul Reiche, head of Toys For Bob, said in an interview that team knew what kinds of risks it was taking, but it decided to step up to the challenge anyway. The story of how they did so says a lot about how to innovate in an industry with so much prior art and risk aversion.

Asked if Skylanders was as big a bet as a Call of Duty game, Rieche (pictured) replied, “Fair enough.” He added, “There were many points where we suggested something very radical. There is an unfair perception that (parent company) Activision Blizzard is risk averse. This shows that when there is a good opportunity, they go for it.”

The idea of melding toys and video games isn’t new. Toy companies created titles such as U.B. Funkeys that also came with toys. But doing a good job with a very ambitious game is rare. And tying together the products in the way that Activision Blizzard has done is unprecedented. Toys For Bob was able to move forward only because it knew that it could handle the task of making a high-quality video game.

“That was the way the whole industry was moving,” Reiche said. “They said they wanted us to reinvent Spyro and the game he appears in. They said they needed something entirely new to generate the return on investment that Activision needed to be competitive.”

So Reiche’s team began toying with toys. They explored how to create toys that could be used directly in games. One of the team’s developers, Robert Leyland, experimented with wireless technology and found something that would work fast. So when you set a toy on an electronic “portal,” the data stored in the toy’s flash memory could be instantly transferred wirelessly into the console and then into the game world.

That way, a toy character could be inserted into the game world simply by placing it onto the surface of a portal. The toy could glow upon contact. RO Design, a technology arm inside Activision, helped with the design of the hardware. They added touches such as the toys having the ability to automatically save their data when they were added to a platform.

“They took it and turned it into something with low power consumption and a mass market design,” Reiche said.

Meanwhile, a senior artist at the company, I-Wei Huang, began the work on the toys. Instead of creating them as 3D animations first, Huang sculpted the characters as physical objects.

Once they had these elements together, they started building the game. They recruited Toy Story film writers Joel Cohen and Alec Sokolow to craft an adventure story for the game. They decided to target the Wii at first.

“We saw no competitors there,” Reiche said. “We thought of how to integrate toys directly into the game play. You play as your toy, and you have an avatar inside the world. You can take your toy to school, and it had a revenue model that worked. It was a blue ocean.”

Reiche said that Toys For Bob could keep it simpler by creating a Wii game for Spyro, without the toys. Dave Stohl, the Activision executive in charge of development, told them to take the bigger bet and go with the toys. As the idea moved up the executive chain, it became bigger and bigger. Toys For Bob built up its team for the Wii game to more than 100 developers. Another 100 developers from other Activision Blizzard studios also helped out. Vicarious Visions made the Nintendo 3DS version and Frima built the web, iPad, and iPhone versions.

About a year ago, the project stood at a critical decision point. Activision Blizzard chief executive Bobby Kotick had to weigh the options for launching the game as it was originally scheduled or pushing it back. He decided to postpone the project by a year, adding a huge amount to the overall budget.

Eric Hirshberg, president of Activision Publishing, a division of the parent company, reviewed every part of the project in fine detail. Reiche had to explain details like why every toy had a certain kind of pose. Hirshberg said the company would bend its marketing plan to support exactly what the creative team wanted to do.

“We had a complete functional game and a set of toys,” Reiche said. “But we all felt we could make this a whole lot cooler. So we went back to polish it. We had to decide that we were going to treat it like other top-tier products like Call of Duty. We chose to put out something awesome.”

Toys ‘R Us got behind the game in a big way, taking the stage with Toys For Bob in a major unveiling at the Toy Fair show in New York in February. The Skylanders toys have been named “top toys for the holidays” a number of times, alongside products from regulars such as Nerf, Hasbro, and Mattel.

“We’ve never shipped a toy before, but we are already in the top tier,” Reiche said.

The extra year gave Activision Blizzard plenty of time to come up with a big marketing plan with a big budget.

The resulting design was for a fighting game where players could stick their toys on a portal, instantly adding them to a game world. They could then play through the adventure, fighting hordes of enemies. Then the players could swap out characters as they wished. When they took the characters home, the toys would retain the memory of what they had done in the game. When you put one of these toys on a portal again, the character will have the same kinds of capabilities that it had recently earned at your friend’s house.

Not only that, but you could level-up a character on the PlayStation 3 and use that same character in a Wii game. You can have a similar experience if you play it on the web or an iPhone or the 3DS.

The game has more than 30 characters. Each one has a “brain” for retaining data and can be used in the adventure story where the goal is to defeat the evil Portal Master, Kaos, and his many minions. The game world is full of monsters, treasures, quests, puzzles, and mythical lands and creatures. You can use the characters in your own game or take them to your friend’s Portal of Power. Players can play cooperatively, or fight each other in a multiplayer arena.

In the meantime, rivals such as Smith & Tinker’s Nanovor hybrid toy-games have crashed and burned. Nukotoys is still aiming to do something similar in the toy-game hybrid market. And Disney Mobile has just launched toys that can be used with a Cars-themed iPad game. The whole idea of hybrid toys is gathering more steam.

The toy stores are lining up racks of the merchandise for Skylanders and they’re promoting them in interactive kiosks. Commercials are starting to run on TV and on YouTube. Activision Blizzard has lined up a considerable inventory of the toys, which will sell for $7.99 a piece.

It’s going to either be a big success or a big crater. But there is no question that the game is innovative and that Activision Blizzard and Toys For Bob are swinging for the fences. That kind of measured gamble is what we all want to see more of in the game industry.

“People should be watching this,” Reiche said. “We are not going at it half-cocked at all.”

Filed under: Business, Games